Tuesday, April 14, 2009

August 18, 2008 - Mohammad Shaikh chairman-IIPC tv from Pakistan is student of renowned muslim scholar Sheikh Ahmed Deedat (Late)-President of IPCI from South Africa. Mohammad Shaikh is a remarkable muslim scholar with charismatic personality, unique in presenting the relevant Ayats / Signs on a particular topic from Al-Qur'an inorder to clarify the Spirit / Essence in English and Urdu. Jazak Allah. May Allah reward him!For any Muslim who face a dilemma when dealing with interest from the banking system, and whether it is permissible or not, this lecture finally and very conclusively clarifies the concept of Riba / increase, which has been erroneously promoted and mistranslated / interpreted through time as the interest transaction of the banking system. A lecture that should be watched in conjunction with the sadqa and zakah lecture for a fuller and detailed comprehension of the concept of Riba / increase which Allah has prohibited (made haram)

Some US$10-15 billion (RM36-54 billion) of Islamic sukuk have been shelved since the onset of the financial crisis because the specialised debt instruments became a replica of conventional bonds, a banker said today.

New issuance of sukuk, commonly known as Islamic bonds, completely dried up because Islamic banks were structuring them incorrectly from the start, said Sohail Zubairi, chief executive officer of Dubai Islamic Bank DISB.DU unit Dar al-Sharia, which advises on how to structure Islamic products.

“We lost at least US$10-15 billion since the onset of the crisis, I’m talking about 2008 second half,” Zubairi told the Reuters Islamic Banking and Finance Summit in Dubai.

Zubairi said companies looking to issue sukuk had been approaching banks with a proposed sum of money they wanted to raise, say US$1 billion, and soliciting bids — much like they would do if they were seeking to issue conventional bonds.

Instead, authentic sukuk issues should involve the company targeting investors first with a business proposal and inviting them to invest in the company or project. The company would also say how much it expected to generate from the project and the size of a potential return, payable regularly.

“Sukuk collapsed because the starting point was conventional. If the starting point would have been correct, I’m sure we would still have been up and running,” Zubairi said.

“The sukuk that were done, I’m sorry to say, were a step-sister of conventional bonds,” he said. “If sukuk were done in the correct manner I think today people will be running to sukuk.”

Demand for investments and financial services that comply with Islamic law has been growing as Muslims seek what they see as more ethical ways to investment their money. Islam bans receiving interest, as well as investing in companies dealing in alcohol or gambling.

The sukuk market is unlikely to rebound until bonds do as it is so intertwined, Zubairi added.

Wednesday, March 25, 2009

Asian shares retreated from two-month highs today as investors paused to assess whether a US plan to deal with banks’ toxic debt would revive the financial system and help pull the economy out of recession.

Japan’s share market shed nearly 1 per cent as bank stocks such as Mitsubishi UFJ Financial Group, the country’s top lender, took a breather, while the yen edged up as the fall in shares tempered appetite for higher-yielding currencies.

The dollar held steady against the euro after a steep rise the previous day on growing expectations of lower euro zone interest rates, and US President Barack Obama said its strength was a sign of confidence in the US economy.

Second thoughts about the US Treasury’s plan to persuade private firms to help rid banks of up to US$1 trillion (RM3.6 trillion) in toxic assets sent Wall Street lower yesterday, reversing some of the hefty gains made on Monday when the plan was released.

Investors remain wary that large advances in stock markets in recent weeks could quickly fizzle out amid a stream of gloomy economic news and weaker corporate earnings as the global recession saps consumer spending and investment.

“The enthusiasm surrounding the US administration’s bank plans has been pared back slightly amidst some doubts about its effectiveness,” Calyon’s global head of FX strategy, Mitul Kotecha, wrote in a client note.

“Nonetheless, the pull back in equity markets was relatively small in comparison to the gains registered over recent weeks and for the most part the reaction to the plans remains positive.”

The MSCI index of Asia-Pacific shares outside Japan fell 0.4 per cent after hitting its highest in more than two months yesterday. It later pared its losses to stand little changed.

The index has gained more than 27 per cent from a five-year low last November.

Yesterday the Dow Jones industrial average ended down 1.49 per cent while the S&P 500 Index shed 2.04 per cent.

S&P futures rose 0.3 per cent in Asian trade today, signalling a slightly positive US start later in the day.

Japan’s benchmark Nikkei fell 0.7 per cent, after jumping 3.3 per cent the previous day to post its highest close since Jan 9. Exporters such as electronics giant Sony Corp tumbled on expectations of weaker earnings.

“The market had entered an extremely overheated zone as of yesterday, coupled with the fact investors lack trading factors now that the US ‘bad bank’ scheme has been unveiled,” said Fumiyuki Nakanishi, manager at SMBC Friend Securities.

Japan reported a record fall in exports in February, with no signs of a demand recovery in its key US and European markets, as well as a sharp decline in imports.

The data pointed to more pain for an economy already mired in its worst recession since the 1974 oil shocks, showing both domestic consumption and overseas demand crumbling under the weight of the global slowdown.

The euro dipped 0.1 per cent against the Japanese currency to 131.69 yen after hitting a five-month high of 134.50 yen in the previous session.

The Australian dollar fell 0.3 per cent to 67.99 yen down from yesterday’s 4½ month high of 69.60 yen, as the pause in stock markets checked appetite for riskier assets.

The euro held steady at US$1.3468 having come down from last week’s 2½ month high of US$1.3739.

US crude futures eased towards US$53 a barrel after an industry group said late yesterday that US crude stocks last week rose much more than analysts had forecast.

US light crude for May delivery fell 72 cents more than 1 per cent to US$53.24, after hitting its highest in nearly three months this week above US$54.00 a barrel.

Indonesia’s finance ministry plans to sell its first global syariah-compliant bond issue, or sukuk, before June, backed by 7.5 trillion rupiah ($650 million) worth of assets, a senior official said on Wednesday.

The government of the world’s most populous Muslim nation has already raised more than two-thirds of its gross debt issuance target for 2009, but it wants to tap a wider investor base using a broad array of instruments including syariah-compliant debt.

Rahmat Waluyanto, treasury director general, said the global sukuk would be issued before a Samurai bond issue which is planned for June, and that the size would depend on the underlying assets available.

“We will adjust it based on the underlying asset, and the underlying assets that we have are (worth) around 7.5 trillion rupiah,” he told reporters.

Separately, Dahlan Siamat, an official in charge of Islamic debt at the ministry, said the underlying assets consist of government property in the capital Jakarta which are worth 7.24 trillion rupiah and in Bandung, the capital of West Java province, which are worth 250 billion rupiah.

The sukuk will be issued according to the ijara, or lease-based, principle.

Islamic law bans interest payments so bond holders are instead paid income derived from assets – for example, rent from property, or from commercial transaction such as trade in goods and services.

Monday, June 2, 2008

Unit trusts have grown in popularity in recent years. It's not hard to figure out why. Unit trusts are the small investor's answer to achieving wide investment diversification without having to come out with prohibitive sums of money. And the benefits do not end at that.

But first, what is a unit trust? A unit trust fund is an investment scheme that pools money from many investors who share the same financial objectives. In exchange for the money, the fund issues units to the investors who are known as unit holders. Unit holders can sell (known as redeeming) their units back to the fund, or buy (and sell) further units.

Managing the fund

Meantime the fund is managed by a group of professional managers (known as the unit trust company) who will invest the pooled money in a portfolio of securities such as shares, bonds and money market instruments or other authorised securities to achieve the objectives of the fund. Because of the large sums collected, the fund manager is able to diversify among various investments in such range and diversity that the risks of investing are minimised.

Income earned

The total assets of the fund determine the value of the fund and the price paid by unit holders or the amount received when they redeem their units. The unit trust fund earns income from its varied investments in the form of dividends, interest income and capital gains. This income is then distributed to the unit holders in proportion to the units they hold, in the form of dividends or bonus units.

Protection for unit holder

As a unit holder, your protection within a unit trust is ensured in the way unit trusts are structured. Unit trusts are actually trusts. The protection is enshrined within the unit trust deed which spells out the respective duties, responsibilities and expectations of the three parties in the unit trust who are namely:

The unit holders who provide the funds for investing;

The unit trust company providing investment, administrative and marketing services; and

The trustee company which holds the assets of the trust on behalf of the unit holders.

There are three sources of information that you must examine when selecting a fund. These are the fund's prospectus, the trust deed and the financial statements comprising the annual and interim reports which are available for inspection, free of charge, at the premise of the fund manager.

Read the prospectus

The prospectus is a very important document as it sets out the fund's goals, investment strategies and policies and the risk-reward position it takes. It may be hard reading being full of legalese, but you must go through the fine print to ascertain that your goals and expectations match that of the fund. The financial accounts will show if the fund is sticking to its game plan and how well it is performing within the plan. Hence as an investor, you should consider the following factors when selecting a fund:

Investment objective - it must be clearly stated or it gives leeway for the fund manager not to carry out your intentions of choosing the fund.

Investment policies - the types of authorised investment and strategies should match your own convictions.

Types and amount of fees - understand them so that you will be left with no surprises.

Historical performance on total returns on an annual basis, NAV (net asset value which is essentially the worth of each unit), expense ratios, and particularly the distribution of income to investors and growth of assets - so that you can gauge how well the fund has performed over time.

Latest investment portfolio - so that you know the percentage of holdings in each kind of asset.

Information on Board of Directors, key management team (especially the fund manager, auditor and trustee.

Saturday, January 19, 2008

Friday, January 18, 2008

While for most Canadians environment is the main issue of concern, poll says they are growingly anxious about jobs and economic future.

The results are found in a survey in which Ontarians express particularly deep unease about their economic prospects.

More are pessimistic than optimistic about the direction of the economy, according to the Globe and Mail.

The poll, conducted by the Strategic Counsel for The Globe and Mail/CTV News, found that 12 per cent rate the economy as the most important issue facing Canadians, 10 percentage points behind the environment and tied with health care.

In Ontario, 16 per cent of those surveyed say the economy is the most important issue, just one percentage point behind the environment in importance.

The survey also sees Canadians as more pessimistic about the direction of the economy. Only 18 per cent believe the economy is getting stronger, compared with 31 per cent who thought so two months ago.

The poll of 1,000 Canadians is accurate to within 3.1 percentage points 95 per cent of the time. It was conducted Jan. 10-13, a period in which premiers met in Ottawa with Prime Minister Stephen Harper to discuss economic concerns.

Friday, November 9, 2007

The US Federal Reserve chief has warned the country may have a difficult time curbing the inflation likely to be sparked by dollar devaluation.

Ben Bernanke noted the dollar's decline could give rise to higher import prices which in turn would lead to inflation.

He deemed the credit crisis, triggered by debtors defaulting on their loans to the banks, to be at the root of the dollar's nosedive.

He sounded further alarms that the recent turn of events in the US economy could send it into serious decline before the end of 2008.

Highlighting the issue of credit crisis, which he claimed has resulted in banks thinking twice when lending money, Bernanke said there was likely to be more "financial restraint on economic growth as credit becomes more expensive and difficult to obtain".

Wednesday, October 31, 2007

Legendary investor Jim Rogers has made a decision to quit the dollar and shift his investments into currencies including China's yuan.

The 65-year-old Rogers said he placed great trust in the Chinese yuan alongside the Japanese yen and the Swiss franc since the US economy was "in recession".

"I live in Asia. It is really not that strange that I am selling out of the US dollar," Rogers told The Daily Telegraph.

"The US economy is undoubtedly in recession," he added. "Many parts of industry are actually in a state worse than recession. If it were not for [Federal Reserve Governor Ben] Bernanke putting huge amounts of money into the market, the stock market would probably be down much more than it is."

Expressing satisfaction with the Shanghai Composite Index closing at 5843 points, Rogers said, "I do not want to sell Chinese stocks. I want to own them forever and I want my daughter to own them."

Saturday, September 1, 2007

The United State's Federal Reserve injects an additional $10 billion into the financial system amid the developing credits crisis in the US.

The endorsement of the ten billion dollar brings the total of injected funds into the financial system to a $147.25 billion since August 9, 2007.

Federal Reserve aims to facilitate the tightening credit stemming from the arising troubles in the high-risk sub prime mortgage market.

Despite the warnings that the spreading credit turmoil could recess the US economy, the Bush administration has repeatedly claimed that the global growth and the US economic fundamentals are dominant and healthy.

Thursday, May 24, 2007

Wednesday, May 9, 2007

The foreign exchange (also known as "forex" or "FX") market is the place where currencies are traded. The overall forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.

Investopedia Says: There is no central marketplace for currency exchange, rather, trade is conducted over-the-counter. The forex market is open 24 hours a day, five days a week, with currencies being traded worldwide among the major financial centers of London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney - spanning most time zones.

The forex is the largest market in the world in terms of the total cash value traded, and any person, firm, or country may participate in this market.

Currency-literally foreign money-used in settlement of international trade between countries. Trading in foreign exchange is the means by which values are established for commodities and manufactured goods imported or exported between countries. Creditors and borrowers settle the resulting international trade obligations, such as bank drafts, bills of exchange, bankers' acceptances, and letters of credit, by exchanging different currencies at agreed upon rates.

The result of all this international trade is that financial institutions accumulate surpluses of different currencies from loan repayments by foreign borrowers, and also from import-export trade financing on behalf of bank customers.

The interbank foreign exchange market is an over-the-counter market, a network of commercial banks, central banks, brokers, and customers who communicate with each other by telex and telephone throughout the world's major financial centers. Foreign exchange traders also make markets or speculate in different currencies, usually anticipating future appreciation of stronger currencies against weaker ones, through the foreign exchange Forward Market and the Currency Futures market.

Thursday, January 11, 2007

An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price.

Investopedia Says: The building of a factory used to produce goods and the investment one makes by going to college or university are both examples of investments in the economic sense.

In the financial sense investments include the purchase of bonds, stocks or real estate property.

Be sure not to get 'making an investment' and 'speculating' confused. Investing usually involves the creation of wealth whereas speculating is often a zero-sum game; wealth is not created. Although speculators are often making informed decisions, speculation cannot usually be categorized as traditional investing.

Finance

The science that describes the management of money, banking, credit, investments, and assets.

Investopedia Says: Basically, finance looks at anything that has to do with money and the market.

finance

Definition: offer loan money; set up in businessAntonyms: call in, take